High-interest tax refund loans cost North Carolina taxpayers about 44 million a year. That's according to a report out today from the state Banking Commission.
State Treasurer Richard Moore launched an investigation into the loans earlier this year. He's also chairman of the commission. The report found that in 86 percent of so-called refund anticipation loans went to low-income borrowers in 2004, and that interest rates on some loans have topped 800 percent.
About half-a-million taxpayers obtain tax refund loans each year. They spend on average 100 dollars a loan for an average refund of about two-thousand-dollars.
The report says that's 44.3 million dollars in refund money that didn't go to taxpayers.
Moore called the loans a "bad deal" for North Carolinians. He says he'll work to bring down "these outrageous interest rates" so North Carolinians can keep all of their refunds.
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